All the media channels talk about the great recession on a daily basis, when they try to explain the current state of the economy. Should we cut or raise rates is being beaten with a stick by all the economists. I’ve heard Janet Yellens name at least a million times since she took the Chair of The Federal Reserve Bank. Now I want to talk about how the recession aftermath is still lingering and the economy is not as rosy as it may seem. Do you know that the labor market is still not doing particularly well, and many employers are padding their numbers in tactical ways? The housing market is better and people are supposedly buying again. Every time I hear the numbers I question what percentage of those new housing purchases are rich investors? In any event the recession has not fully gone away and I want all of you to get ready for a possible inflationary period to hit your wallet.
The recession aftermath is influencing major changes to corporate America, where blue chip companies are buying each other with reserve cash flow. The M& A markets are on fire in the past 2 years, and it is primarily due to all the extra cash these companies have on the side line just sitting on the bench. These companies are buying revenue instead of trying to grow revenue. What does that really mean for the average person? When a big company merges with another big company the first thing to happen is a reduction in jobs. They are eliminating more jobs without offshoring them, and nobody seems to bat an eye. To explain further, just recently Microsoft revealed it will reduce its workforce by 12K jobs, due to the merger they had with Nokia. On the drive in to work Fox Media placed a buy bid for Time Warner for 85 Billion dollars and a few seats on the board of Fox. What is the first thing they will do if this purchase gets approved? How many people can we skin? They call a reduction in jobs a corporate synergy to mask the real threat to America’s citizens. If the government keeps allowing these mergers and acquisitions to take place it will systematically reduce available labor positions by millions. When big companies get even bigger, they reduce operating costs, raise prices to justify the purchase of the smaller company, and monopolize the markets.
Recent Mergers:
The Dollar Tree & Family Dollar
Zillow & Trulia
Facebook & Whatsapp
Google & Multiple Companies
Amazon & Double Helix
Actavis & Forest Laboratories
GE & Alstom
Microsoft & Various Companies
Apple & Beats
Fox & Time Warner (In Review)
Comcast & Time Warner Cable (In Review)
Besides a run up in the stock market and the stock markets recovering from the pre-08 levels, nothing much has improved. Individual salary levels remain stagnant and the inequality of the rich and the poor is widening. All of these economic factors will weigh in on the future state of the economy. What economy you may ask, with all the debt the U.S. owes others, it can be changed to the world’s economy. We might have to one day pay tax to China. (Imagine that!) I am not a doomsday type of person, but all the factors I mentioned above can’t possibly add up to be good for any economy.
In conclusion when a Lamborghini dealership becomes a Japanese take out restaurant, you know the recession has deeply affected our economy. (In my town it really happened) I don’t want to come off as a person who is against company growth and profits, but a line in the sand must be drawn. That line has to be stopped when companies are taking away jobs and hurting the average person. The fat cats are getting lazy, and using money the wrong way. Invest money by growing assets that give revenue and not by buying them through mergers. The government needs to find a system in order to change the financial issues going forward, because it has been known that companies cannot do it themselves aka TOO Big to Fail companies and the Great Recession.
Recap:
A raise in interest rates might get us Inflation -Higher Prices
Mergers & Acquisitions – Reduces the Labor Force
Banks are Bigger than TOO BIG to FAIL
The Government has to much Debt X 17 Trillion
Fewer Companies means a Monopoly of Services
Less Competition equals Higher Prices
Comment if the recession aftermath has affected you in any way?
Rich Uncle EL
My personal experience with the job market is that its doing much better now. It hasn't yet affected me directly but I've seen plenty of people who I work with jump ship for more attractive offers from other companies. The job market seems to be heating up and hopefully wages will follow as companies struggle to retain their talented people.
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Hey Thomas there’s no denying that unemployment is doing better than 2009. I was actually referring to companies secretly eliminated jobs by merging. Also it depends the area you live in, because all though major cities have seen unemployment decrease, many areas are still experiencing high unemployment. Thanks.
This is scary. While unemployment is common in theatre anyway, it has been particularly difficult the last few years as many theatres lost their funding and had to close- so fewer jobs and even more competition.
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Yes it’s getting worse on the overall job side of things and improving on the start up & techie jobs. I just wanted to give a brief overview of the state of the economy based on the info I’ve gathered. Thanks for the comment.
It is hard to say in my state how the overall market is doing, I know that it is doing better in recently since the peak of the recession, but the entire last decade has been brutal it seems (although I didn't start working til 04 when I turned 16, so 2000 until 2004 is just speculative based on the number of factories closing). Things seem to be doing better, but I don't have a long enough time frame to really compare to boom times. But I think I know more people that have settled on jobs or moved out of state rather than moving up here.
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That’s unfortunate your state is not staying competitive, many governors are doing everything to attract business into states. This is one way to boost jobs in a state, like Texas recently did with Toyota. Toyota is moving headquarters from cali to Texas.
The company I work for is in the process of a merger right now. The main reason is to reduce the workforce, myself included!
That is unfortunate, I wish you the best. Business merger's can hurt millions of people, it is up to the government to stop them. But then CEO's will say America is not a capitalist economy. Thanks for the comment.